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Pumps run dry in Myanmar as forex crisis pushes up prices

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Pumps run dry in Myanmar as forex crisis pushes up prices
August 14, 2024
Article Body Text Many petrol stations in Myanmar’s largest city, Yangon, were closed on Wednesday because of a severe shortage of fuel, residents told Radio Free Asia, the latest evidence of an economy struggling with a multitude of problems since the military overthrew an elected government in 2021. At the root of the shortage appeared to be the plummeting value of the kyat currency, and the junta’s efforts to rein in the inflation that the weak kyat is causing, along with the economic disruption stemming from the conflict that has swept the country since the military takeover. Some gasoline suppliers were rationing fuel, while others have shut down entirely, residents said. Taxi driver Lin Lin, from Yangon’s South Dagon township, said any petrol stations that had supplies were rationing it while most had simply shut. “If we go to a station that says it has gasoline, it runs out before our turn because of the long line,” he said. “I have to drive with whatever remaining gas I have for the day.” The impact of the shortage was being felt far and wide. “In past shortages, some petrol stations gave priority to our ambulances but this time, we’re all in the same position,” said one healthcare volunteer, who declined to be identified as talking to the media. “No station will give fuel to our ambulances first.” A motorbike driver from Yangon’s Dagon Myothit township said the price of fuel had nearly doubled in recent days to 5,000 kyat a liter and he could not carry on his work as a delivery driver. The junta’s Petroleum Products Regulatory Department early this month dismissed talk of a fuel shortage saying in a statement that Yangon’s Thilawa Port had adequate supply for the region through to mid-August. Myanmar imports most of its fuel. It has not commenced publicly since then, and nor have any other junta authorities. RFA telephoned the petroleum department to inquire about the fuel shortage but the office did not respond. Fuel tanker were lined up at the Yangon port waiting for supplies this week. <hr/> RELATED STORIES: <a href="https://www.rfa.org/english/news/myanmar/myanmar-rice-arrest-07032024214037.html">Rice crisis triggers arrests, market upheaval in Myanmar</a> <a href="https://www.rfa.org/english/news/myanmar/closed-borders-india-cause-food-fuel-shortages-western-myanmar-08122024200118.html">Closed borders with India cause food, fuel shortage in west Myanmar</a> <a href="https://www.rfa.org/english/news/myanmar/thailand-workers-payment-08082024025943.html">Myanmar junta orders its workers to pay part of their Thai wages</a> <hr/> Distortions The junta is trying to limit the impact of the falling kyat by setting an artificially high exchange rate for it, creating distortions through the economy, business owners told RFA. The free market rate for the kyat is around 6,000 to the dollar this week but the central bank has set a rate at 2,100 kyat, creating huge problems for buyers, said one Yangon businessman asking to remain anonymous in order to speak freely. “At 2,100 kyat, who would be able to sell fuel at a high enough price, right? So that money can’t be made back. The junta aren’t the ones selling gas and we need to raise the prices,” he said. “But when stations raise their prices, the junta arrests them, creating a lot of issues.” With the kyat sliding by more than a quarter of its value over the past year, the junta has taken a similar approach in other sectors, including the gold and <a href="https://www.rfa.org/english/news/myanmar/myanmar-rice-arrest-07032024214037.html">rice markets</a>, cracking down on traders who try to sell at prices reflecting the market exchange rate. The World Bank, in its Myanmar Economic Monitor report for June, said fuel prices had risen by 31% year-on-year, due to rising global prices, the rapid exchange rate depreciation and other constraints. The Central Bank of Myanmar had this year allowed fuel importers access to subsidized exchange rates, at least for part of their imports but prices were still trending higher, the World Bank said. “Increased foreign currency shortages have constrained fuel importers’ access to forex at preferential rates, pushing local prices (particularly of gasoline) higher,” it said. The security risk management company Crisis24 said fuel was also running short in the second-biggest city of Mandalay and the capital Naypyidaw, and it warned that frustrated members of the public could take to the streets to protest, especially if shortages were prolonged. “Clashes between police and protesters could occur; security personnel have used lethal force to disperse past rallies,” the Montreal-based company warned on Tuesday. Translated by RFA Burmese. Edited by Kiana Duncan and Mike Firn.
Content Type Text
Language English
NewsML Media Topics Arts, Culture, Entertainment and Media
Subtitles / Dubbing Available No
Rights RFA
Network VOA
Embargo Date August 14, 2024 08:49 EDT
Byline By RFA Burmese
Brand / Language Service Voice of America - English